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Understanding and Applying Innovation Strategies in the Public Sector by steven cohen and william eimicke. 0his paper see1s to identify strategies for bringing innovation into Public Sector organi2ations3 and develop some ideas about ho and hen to deploy these strategies# 4e discuss management innovation conceptually3 and then discuss some specific innovation techni5ues of management innovation no being e6perimented.
Understanding and Applying Innovation Strategies in the Public Sector by steven cohen and william eimicke. 0his paper see1s to identify strategies for bringing innovation into Public Sector organi2ations3 and develop some ideas about ho and hen to deploy these strategies# 4e discuss management innovation conceptually3 and then discuss some specific innovation techni5ues of management innovation no being e6perimented.
Understanding and Applying Innovation Strategies in the Public Sector by steven cohen and william eimicke. 0his paper see1s to identify strategies for bringing innovation into Public Sector organi2ations3 and develop some ideas about ho and hen to deploy these strategies# 4e discuss management innovation conceptually3 and then discuss some specific innovation techni5ues of management innovation no being e6perimented.
Understanding and Applying Innovation Strategies in the Public Sector
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Understanding and Applying Innovation Strategies in the Public Sector By Steven Cohen and William Eimicke Graduate Program in Public Policy and Administration School o International and Public Aairs Columbia University Prepared or Presentation to the !"th Annual #ational Conerence o the American Society or Public Administration$ %une &'(%uly )$ *''+$ Atlanta Georgia, I, -n Public .anagement Innovation 0his paper see1s to identify strategies for bringing innovation into public sector organi2ations3 and develop some ideas about ho and hen to deploy these strategies# 4e discuss management innovation conceptually3 and then discuss some specific techni5ues of management innovation no being e6perimented ithin the public sector# 0hese techni5ues include: Strategic planning3 reengineering3 total 5uality management3 benchmar1ing3 team management and privati2ation# 0his is not an e6haustive list of innovation techni5ues but rather a set of the most common innovation techni5ues no used in the public sector# 4hile e ill address each techni5ue separately3 in the real orld they tend to be used in combination and in no ay should be seen as mutually e6clusive# In fact3 a ma7or assumption of this paper is that despite the presence of consultants and others ho advocate one techni5ue as the 8right8 one to follo3 effective management innovation re5uires a blending and tailoring of a variety of innovation techni5ues to an organi2ation9s uni5ue culture and environment# II, /he Concept o Public Sector .anagement Innovation :or us3 public sector management innovation can be best defined as the development of ne policy designs and ne standard operating procedures by public organi2ations to address public policy problems# It is important to note that e are dealing ith both the design and the management of policies and programs# ;ureaucracy as created to provide stable3 to use <aufman9s classic formulation3 preformed decisions3 to specific relatively stable phenomena and stimuli# 0hese standard operating procedures ere to be long=standing and unchanging# As e enter the &%st century e see our society and economy rapidly changing in response to ne technologies that have facilitated greater e6change and economic and social interdependency# 0his accelerated rate of change has challenged the traditional bureaucratic form of organi2ation to develop ne methods for rapidly modifying organi2ational file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $& of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector strategies and the S>Ps designed to implement those strategies# Public sector organi2ations are being challenged to learn to embrace constant change# Studies of successful public management innovation have discussed the nature of change processes in the public sector# >livia ?olden $%!!*' studied innovation in public sector human service organi2ations and 8the implications of innovation by groping along#8 ?olden studied the inners of the %!+" :ord :oundation Aards program for innovation in public management and tests the use of to models of innovation in the public sector: 0@A P>BICC PBADDID? .>DAB: 0he emphasis in this model is on innovation through creative policy design# In this formulation3 innovation is the tas1 performed by policy analysts hile line bureaucrats oppose innovation as they defend their traditional standard operating procedures# 0@A ?E>PID? AB>D? .>DAB: 0he emphasis in this model is on field=level e6perimentation ith ne ideas# According to ?olden: 84e cannot 1no ahead of time hat the results of our ideas ill be3 because the comple6ities of the real orld cannot be anticipated and because ideas divorced from rich operational e6perience are so general that they are li1ely to be systematically rong# ;ecause e cannot 1no the results of our ideas3 e need to try them out in action and learn from e6perienceF based on that learning e may need to modify not only our actions but also the policy idea and the ordinal ob7ectives#8 $p# &&"'# ;ryna Sanger and .artin Bevin build on ?olden9s analysis in their study of more than &, successful innovations# 0hey conclude that public management innovation is rarely characteri2ed by revolutionary brea1throughs# It typically involves rearranging old practices in ne ays# Eational analysis of options before implementation seems to be less useful in organi2ational learning than evaluations of programs already underay# ;oth of these studies indicate that innovative programs and more effective program outcomes seem to be a function of a spirit of e6perimentation and a illingness to rapidly adopt and discard practices in the face of evidence about the effectiveness of those practices# 4hile these studies do not distinguish the design of organi2ational routines from the design of programs and policies3 e believe that their finding is e5ually applicable to both# 0he supposed failure of various organi2ational reform efforts is fre5uently a result of attempts to 5uic1ly and uniformly apply an organi2ational reform methodology throughout an organi2ation# Eather than seeing these methods as instruments of incremental organi2ational reform3 senior management and their high=priced consultants see these ideas as all encompassing organi2ational ideologies# 0hey are over= sold and misapplied and often fail for those reasons# Successful innovation is often incremental and small scale because the factors conditioning the success of innovative practices vary according to the organi2ation9s internal capacity3 e6ternal environment and file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $- of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector goals or mission# Aach organi2ation is different and faces varied situations at particular points in time# 0he techni5ues re5uired to promote organi2ational innovation must therefore be situationally determined# :urthermore3 the stability of the organi2ation9s environment changes over time3 re5uiring varied degrees of innovation# :inally3 the internal social structure and capacity of an organi2ation to support and carry out changed standard operating procedures ill also vary# In other ords: 8one si2e does not fit all8# In our on efforts to adapt 0G. to specific government situations e developed a pro0ect(oriented approach to 0G. $Cohen and Aimic1e: %!!)' # It represents an e6plicit recognition that the specific shape that 0G. should ta1e ill vary in each and every or1 situation# 0he general principles of 0G. could be taught in to or three hours3 but the actual application ould evolve over time in individual organi2ational units# >ur 0G. or1 taught us several other things about bringing innovative practices into organi2ations# :irst3 0G. alone3 as not a sufficient approach to ma1ing organi2ations agile3 and effective in rapidly changing conditions# If the organi2ation9s overall strategy as faulty3 or its basic agency=ide systems ere in massive disrepair== for e6ample3 a personnel system that prevented hiring and retaining 5uality staff== 0G. ould have the same effect as rearranging dec1 chairs on the 0itanic# 0hrough 0G. e might have designed an effective practice for posting 7obs or providing promotional opportunities3 but if no one gets hired or promoted because the overall system is flaed3 our nely designed processes ill have no real impact on the organi2ation9s performance# An e6ample of the type of system failure e are describing might be a hiring process ith so many approval steps that e6cellent candidates attracted through a nely redesigned posting and advertising process ta1e 7obs ith other organi2ations because of delays in getting hired# >ur 0G. e6periences started us thin1ing about ho and hen to utili2e other reform strategies: Under hat conditions is our imagination dry and our need to benchmar1 other organi2ational practices acuteH 4hen should e accept the high organi2ational cost of top=don3 large=scale system reengineeringH 4hen should e substitute a contractor9s or1 for our onH 4hen has the organi2ation9s environment changed sufficiently to arrant a revision of the organi2ation9s mission3 focus and strategyH 0o hat degree should team processes replace individual assignmentsH 0hese 5uestions led us to develop an overall frameor1 for management innovation techni5ues that delineates their characteristics as techni5ues of change and assesses their utility in specific situations# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $) of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector III, What is the Purpose o .anagement Innovation1 What Are We /rying /o Change2 0he first issue e face is: 4hat aspect of the organi2ation are e trying to changeH 0he anser to this 5uestion can lead to the use of a particular innovation techni5ue3 or a se5uence of techni5ues# 0he first step in addressing this 5uestion is to identify the potential arenas of organi2ational change# In our vie there are three arenas3 each calling for different organi2ational change techni5ues: A6ternal: 0he arena that comprises the organi2ation9s environment# Issues addressed here include the organi2ation9s mission3 resource base3 mar1et niche3 and political support/opposition# .acro=Internal: 0he arena of organi2ational behavior dealing ith large=scale3 organi2ation=ide systems and infrastructure that supports the activities of individual organi2ational units# 0his ill include the organi2ation9s budget3 purchasing3 personnel3 information3 security3 and communication systems as ell as other similar support systems and structures# .icro=Internal: 0he arena of organi2ational behavior that ta1es place ithin individual organi2ational units as standard operating procedures are developed3 implemented and analy2ed# An organi2ation can have needs in all three arenas3 and every techni5ue discussed can have some utility in each arena3 but different techni5ues tend to have greater usefulness in particular arenas# :or e6ample3 strategic planning is the best method for dealing ith issues that appear in the e6ternal arena# Eeengineering is ell suited for some macro=internal issues3 and total 5uality management is an e6cellent method for addressing issues in the micro=internal arena# I3, /echni4ues o .anagement Innovation 0o effectively apply innovation techni5ues3 e need a shared definition of each techni5ue# 0his section of the paper describes and assesses a select group of management innovation techni5ues# As noted earlier3 e ill focus on strategic planning3 reengineering3 total 5uality management3 benchmar1ing3 team management and privati2ation# 4e ill define the techni5ue3 describe ho it or1s3 and discuss the typical benefits or impacts and costs of using these techni5ues *, S/5A/EGIC P6A##I#G DEFINITION: Iames .ercer3 in his Strategic Planning for Public .anagers observed that: 8At least three decades ago Peter Druc1er defined planning as actions ta1en right no to reach tomorro9s ob7ectives# @is definition still holdsF planning means deciding hat has to be done to prepare a given organi2ation for the future#8 $p# %J' C#4# @offer and D# Schendel define strategy as the basic pattern of current and planned resource deployments and environmental interactions that indicate ho the organi2ation ill achieve its Understanding and Applying Innovation Strategies in the Public Sector ob7ectives# In 0he De Affective Public .anager $Cohen and Aimic1e: %!!,' e observe that: file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $, of &%' (%%/)/&**+ ":,-:-- P./ 8A strategy attempts to delineate the resources that ill be used to pay for specific activities designed to accomplish specific ob7ectives# Strategy formulation begins ith the identification of ob7ectives and the determination of methods for reaching ob7ectives# 0hese ob7ectives and activities are then scaled to fit ithin resource constraints# Aach element of a strategy $ob7ectives3 activities and resources' is constrained by political3 social3 economic and environmental variables# 0he ob7ectives and activities of public organi2ations are constrained by the formal authority provided by statute#8 $p# %!"' HOW IT WORKS: A strategic planning e6ercise typically involves an organi2ation ide initiative to reformulate goals and develop ne methods of achieving those goals# At a minimum3 managers from 1ey organi2ational units are involved in the process# Sometimes participation is broader3 involving staff from throughout the organi2ation# De information about the organi2ation9s environment is presented and assessed regarding its impact on the organi2ation9s goals and activities# .eetings are held to stimulate the creation of ne approaches to the organi2ation9s mission and or1# An inventory of the organi2ation9s capabilities and needs is also conducted to determine the organi2ation9s capacity to implement the ne strategy# BENEFITS: Strategic planning gives the organi2ation a chance to loo1 at itself comprehensively3 in the light of ne information# 4hen it is developed by a ne management team3 it provides that team ith an opportunity to form a cohesive identity# 4hen it is developed by a chief e6ecutive3 independently3 it provides that e6ecutive ith a medium to e6press and define his or her leadership# 4hen a strategy is developed ith broader participation it can be used to create a sense of shared mission and values3 and can be used as a political tool to develop support for organi2ational change# In the public sector3 an organi2ational strategy can prevent an agency from being ta1en in rapidly shifting directions by the political mantra of the moment# COSTS: A high=5uality strategic planning process re5uires significant e6penditures of management time and analytic resources# If the analysis is not done ell3 the organi2ation may misread its environment3 or mis7udge its on capability# 4hile organi2ational change tends to be incremental3 some strategic planning e6ercises assume that organi2ations are capable of massive3 rapid change# In the public sector3 an organi2ational strategy can create political difficulties because it not only indicates hat an organi2ation is planning to do3 it re5uires e6plicit trade=off decisions about hat an organi2ation ill not do# 0his can stimulate political opposition to the organi2ation3 and stimulate Understanding and Applying Innovation Strategies in the Public Sector file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $" of &%' (%%/)/&**+ ":,-:-- P./ publics and interest groups that previously ere unaare that of the organi2ation9s plans# &, 5EE#GI#EE5I#G DEFINITION: Eeengineering is 8the fundamental rethin1ing and radical redesign of business processes to bring about dramatic improvements in performance38 according to .ichael @ammer and Iames Champy3 authors of Eeengineering the Corporation: .anifesto for ;usiness Eevolution3 the %!!- boo1 that populari2ed this innovation strategy $@ammer K Champy3 %!!-3 p# -&'# 0he authors emphasi2e 1ey ords3 particularly 8fundamental83 8radical83 8dramatic83 and 8processes8# 0hey stress 8starting over8 and 8clean sheet of paper8 as the reengineering ay of thin1ing# 0he authors also focus on hat reengineering 8is not8: It is not donsi2ingF It is not restructuringF It is not a fadF and3 It is not more of the same# Eeengineering has also become very popular# 0o million copies of the original boo1 are in circulation and the to authors have each ritten se5uels# According to .ichael @ammer3 reengineering consulting fees e6ceeded LJ billion in %!!) alone3 driving L-* billion in related corporate investments $@ammer3 %!!,3 p# 6i'# HOW IT WORKS: Perhaps to provide the ma6imum opportunity for consulting arrangements3 none of the three boo1s by the creators of the reengineering movement are very specific about ho a reengineering pro7ect should be conducted3 step by step# @ammer and Champy are clear that the larger the scale of the pro7ect3 the higher the probability of success# 0hey are also clear that reengineering is a top=don strategy3 re5uiring strong and visible commitment from the CA> and communication/enforcement of that commitment don the organi2ational hierarchy# In general terms3 reengineering begins ith the appointment of a 8process oner8 by the CA># 0he process leader then convenes a reengineering team3 ho ill reengineer the process under revie3 ith the assistance of an internal reengineering 8c2ar8 and a hired3 e6pert reengineering consultant# A reengineering steering committee can also be established to provide a sounding board# >nce the team has been assembled and all the aforementioned roles officially designated3 the process can begin# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $J of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector 4hile each reengineering effort is in many respects uni5ue3 common steps include: %# .ap the current processF &# Identify the steps that add valueF -# Aliminate the steps that don9t add valueF )# Use a triage mentality3 emphasi2ing speed3 5uic1 turnarounds3 prompt service and a single point of contact for customers and suppliersF and3 ,# Eeengineer first3 then bring in automation and ne information systems technology# As reengineering has been applied to government3 some uni5uely public concerns must be accommodated# Also3 the realities of public organi2ational behavior have led to some modifications of the process# 0o begin ith3 government organi2ations must balance the constitutional re5uirement of due process in striving to meet consumer demands for prompt service# And hile public organi2ations see1 to include customers in reengineering of public service delivery systems3 they must remain attentive to the dangers of conflicts of interest and abuses of the public trust# In his very instructive3 8A ?uide to Eeengineering ?overnment83 Eussell Binden suggests seven principles to guide reengineering in the public sector: %# >rgani2e around outcomes3 not functionsF &# Substitute parallel for se5uential processesF -# ;ring donstream information upstreamF )# Capture information once3 at the sourceF ,# Provide a single point of contact for customers and suppliers henever possibleF "# Ansure continuous flo of the main processF and3 J# :irst reengineer3 then automate# It is our observation that here reengineering in the private sector virtually alays occurs ithin the same organi2ational frameor13 government reengineering often involves the transfer of the process being changed from its current organi2ation to a different3 e6isting agency or3 more often3 for it to be Understanding and Applying Innovation Strategies in the Public Sector reestablished as a free=standing3 ne agency# 4hile many re=organi2ations are more symbolic than real3 file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $+ of &%' (%%/)/&**+ ":,-:-- P./ very often the creation of a ne public sector organi2ation is used as a ay to reengineer a set of basic organi2ational processes# BENEFITS: @ammer and Champy3 together and separately3 cite a long list of testimonial case studies to document the efficacy of reengineering3 including I;.3 :ord3 <oda13 @allmar13 0aco ;ell3 Capital @olding and ;ell Atlantic# Eeengineering proponents identify increased productivity3 groth3 employee empoerment3 higher morale3 loer overhead and improved customer service as benefits of the process# Its advocates also maintain that reengineering enables organi2ations to adapt to meet the needs of customers and the demands of competition and change# 0hey argue it recogni2es the permanence of change and constructs a model of supportive competitiveness and groth ith service# .oreover3 it refocuses the organi2ation on its vision and purpose# COSTS: Eeengineering is a high cost and high ris1 strategy# A6pensive outside consultant fees are only the beginning# 0he fear and subse5uent dislocation caused by 8blan1 sheet8 analysis disrupts both efficient e6isting processes as ell as those in need of immediate improvement# 0he organi2ation9s functioning during the transition period is disrupted and sloed# Despite the denials of its true believers3 reengineering has become a cover for large scale donsi2ings and purging of analysts and middle managers# As a bi=product3 many of the organi2ation9s best people $ho the organi2ation does not ant to lose' leave before the e6pected blood=letting starts# And3 hile supporters also claim it is 8not restructuring83 the costly and time=consuming process of shuffling the organi2ational bo6es often accompanies the reengineering e6ercise3 particularly in the public sector# Eeengineering9s laudable emphasis on holism and seamlessness is also a limiting factor# Putting everything on the table can be daunting and can raise opposition from every corner of the organi2ation# .oreover3 hile competition and change3 technological and otherise3 march forard daily3 a reengineering revolution ta1es about a year to accomplish# And3 is it feasible3 in any organi2ation3 to have annual revolutionH In the public sector3 government operations are generally not disciplined by competitive mar1ets# Ideally3 public sector reengineering ould be accomplished through consensus and universal participation# ;ut3 the non=stop public and media pressure to cut the cost and si2e of government 7ust about guarantees that public sector reengineering becomes a closed3 pre=destined donsi2ing e6ercise# Eadical redesign in the public sector is also severely constrained by partisan differences regarding government9s mission3 short=run considerations driven by the ne6t election3 legislative mandates3 policy differences beteen the legislative and e6ecutive branches3 civil service restrictions3 and the opposition Understanding and Applying Innovation Strategies in the Public Sector file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $! of &%' (%%/)/&**+ ":,-:-- P./ of public employee unions# Dor are the resources often available in the public sector for reengineering consultants or the e5uipment and information technology needed to implement the recommended process changes# :inally3 a great deal of cynicism has built up in public sector bureaucracies about the ne6t innovation 8silver bullet8# Bong term middle managers have seen PP;S3 Mero=based ;udgeting3 .;>3 0G. and Eeinvention directives come and go ith the ne6t election or change of commissioner# Protected by civil service3 many of these middle and higher public sector managers ill ait out or even clandestinely sabotage the reengineering effort# 0hat is hy e believe that the transfer of the process to be reengineered3 either to an e6isting3 or an entirely ne agency is the most li1ely ay for reengineering to succeed in the public sector# ), /7. DEFINITION: 0otal Guality .anagement can be reduced to three central elements $Cohen and ;rand: %!!-': %# Collaboration ith suppliers to ensure that the supplies utili2ed in or1 processes are ell designed and fit for use# &# Continuous employee analysis of or1 processes to improve their functioning and reduce process variation# -# Close communication ith customers to identify and understand hat they ant and ho they define 5uality# HOW IT WORKS: 4e have developed a government=oriented adaptation of 0G. that e call pro7ect=oriented 0G.# It includes the folloing elements: 1. A focus on production in th fi!d. .anagement and or1ers should focus their attention on the process of producing goods and services# Understanding e6actly hat happens hen or1 is performed is an essential element of 0G.# Guality can only be improved once management and or1ers have completed a step=by=step description and analysis of the or1 process# ". Wor#r p$rticip$tion. In order to increase the level of attention paid to production3 management must depend on or1ers to analy2e and suggest improvements to or1 processes# Since or1ers perform these tas1s3 only they have access to all the information about ho or1 gets done# If management does not obtain this information3 file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%* of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector it is very difficult to improve 5uality# %. Co&&unic$tion 'ith custo&rs $nd supp!irs. In order to improve 5uality3 a or1er must have supplies that are ell designed and fit for use# Supplies can include computer e5uipment3 forms3 or directions from a supervisor# If 5uality is to be improved3 suppliers must learn ho to tailor their supplies to the needs of particular production processes# Similarly3 in order to determine hat customers ant and ho customers define 5uality3 an organi2ation must constantly be learning their customers9 preferences# (. R$pid ch$n)s in st$nd$rd opr$tin) procdurs $nd const$nt tr$inin). 0G. re5uires that organi2ations constantly analy2e and change or1 processes# Continuous improvement re5uires continuous modification of standard operating procedures and the communication of those ne processes throughout the organi2ation# *. S&$!!+sc$! pro,cts $t th -)innin). 0o teach or1ers ho to communicate ith suppliers and customers and analy2e their on or1 processes it is best to start ith small3 easy=to=understand aspects of the organi2ation9s daily or1# 0his builds a record of visible accomplishments 5uic1ly and avoids misinterpreting boundary disputes as 0G. failures# .. E/ntu$! in/isi-i!it0. After a fe years 0G. is simply 8the ay e or1 around here#8 1. 2ti!i3in) 4istin) dp$rt&nt$! procdurs $nd structurs $s $ found$tion. Eeinforce the importance of 0G. through routine management processes# Avoid establishing separate 5uality organi2ations to implement 5uality improvement pro7ects# BENEFITS: 0G. can enable an organi2ation to tap into 1noledge about or1 processes possessed only by or1ers# It can empoer staff to thin1 and can enhance morale# It can result in higher 5uality and loer cost production as or1 steps are rationali2ed and supplies are improved# It can provide a means for bringing customer preferences into an organi2ation3 increasing the organi2ation9s ability to deliver hat their customers ant# COSTS: file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%% of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector If the organi2ation9s overall strategy is faulty3 0G. ill have the effect of improving production of the rong thing# :urthermore3 if standard private sector 0G. is applied unmodified in government3 too much ill be tried too soon and the effort ill probably fail# Pro7ect=oriented 0G. is public=sector oriented and recogni2es the fact that government organi2ations are characteri2ed by independent poer bases# 0he leaders of these poerful independent units must be recruited to 0G.# 0hey cannot be forced to comply# If these middle managers do not support 0G.3 they ill simply ait out the transitory elected and appointed officials championing the initiative and 1ill it at the first opportunity# ;ecause it is so difficult to fire these managers3 they cannot be sept aside by the top=level leadership as called for by Deming in his version of 0G.# Another cost of 0G. in the public sector has to do ith the difficulty of reconciling the claims of competing or contradictory customer demands# Unli1e the private sector3 the government cannot simply decide it only intends to serve a mar1et niche# :urthermore3 sometimes the people ho supply the resources for a service are not the direct users of the service# 0his means you ill have one set of customers paying and another set of customers receiving a particular service# :or e6ample3 8ta6payers8 pay for elfare programs but elfare recipients $ho may or may not be ta6payers' actually use elfare services# 8, BE#C9.A5:I#G DEFINITION: ;enchmar1ing involves finding3 adapting and implementing best practices# ;ruder and ?rey define it as 8a rigorous yet practical process for measuring your organi2ation9s performance and processes against those of best=in=class organi2ations3 both public and private3 and then using this analysis to improve services3 operations and cost position dramatically#8$;ruder and ?rey3 %!!)F p# S=!'# E#I# :ischer defines benchmar1ing in performance measurement terms: 80hrough a series of performance measures== standards 1non as 8benchmar1s8==a person can identify the best in a class among those doing a particular tas1# 0hen3 the best practices are analy2ed and adapted for use by others anting to improve their on ay of doing things#8$:ischer3 %!!)F p# S=-' HOW IT WORKS: ;enchmar1ing as a stand alone management strategy is a relatively ne and evolving set of techni5ues# Its roots go bac1 to performance measurement3 including the IC.A ground=brea1ing efforts to measure municipal activities in %!-+3 through Deming and his folloers3 the @oover Commissions3 and PP;S# In its current form3 ;ruder and ?rey $%!!)F pp# S=!=S=%)' have set out the most detailed agenda3 the folloing seven step protocol: %# Determine hich function ill benefit most from benchmar1ingF &# Identify 1ey cost3 5uality and efficiency measures for those functionsF file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%& of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector -# Conduct an e6pert opinion survey and literature revie to find the best in class organi2ation for each measureF )# .easure the best in class performance in the 1ey areas identifiedF ,# Compare your organi2ation9s performance against the best in class and 5uantify the gapF "# Specify actions to close the performance gap to best in class and3 if possible3 the steps necessary to 8leap=frog8 the current industry leaderF and3 J# Implement those actions and monitor your performance# BENEFITS: ;y continuously see1ing to identify the best=in=class and duplicate or surpass their performance3 an organi2ation can embed in its culture and behavior a strong spirit of competitiveness3 pride3 confidence3 energy and striving for improvement# ;enchmar1ing is also a relatively lo tech3 lo cost and 5uic1 response techni5ue that almost any organi2ation can adopt# ;enchmar1ing also seems to be common sense and is easily understood by managers3 or1ers3 suppliers3 customers3 the general public and the media# COSTS: ;enchmar1ing can easily become bogged don in performance measurement and lose sight of the real ob7ective of performance improvement# 0his is particularly significant as measuring the performance of organi2ations3 particularly public organi2ations ith multiple goals3 is often a very difficult tas1# As :ischer suggests==no data are ever perfectF small differences should not be considered overly meaningfulF and comparisons ith competitors should be used to find red flags# $:ischer3 %!!)F p# S=,'# Sometimes3 significant factors may be too difficult or even impossible to 5uantify $eg#3 spirit3 energy or attitude'# ;enchmar1ing can lead to limits on creativity by focusing on copying hat already has been achieved3 instead of encouraging 8out of the bo68 thin1ing and loo1ing for 5uantum brea1=throughs# And it can become a ceiling on achievement in a given field# It can also lead to blind attempts to imitate hen more careful analysis ould relieve cultural3 temporal3 geographic or other characteristics that limit the replicability of the selected benchmar1# :inally3 the cost of benchmar1ing is seldom noted in the literature or considered in the field# Eesearch ta1es time3 energy and resources# 0he more e6tensive the benchmar1ing effort3 the more li1ely it is to consume the organi2ation9s innovative capacity# 0a1en to an e6treme and combined ith a comple6 performance measurement system to establish baselines3 benchmar1ing can begin to negatively affect file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%- of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector the 5uality and 5uantity of services delivered# !, /EA. .A#AGE.E#/ DEFINITION: In a or1place conte6t3 a team is a group of people pooling their s1ills3 talents and 1noledge in a mutually supportive effort to complete a pro7ect3 reach a goal or solve a problem# >r3 a team can be defined as a group of people dran from different disciplines3 ho or1 together on a permanent basis to carry out critical organi2ational tas1s# Similarly3 in their very successful3 0he 4isdom of 0eams: Creating the @igh=Performance >rgani2ation3 Ion <at2enbach and Douglas Smith define teams as 8a small number of people ith complementary s1ills ho are committed to a common purpose3 performance goals3 and approach for hich they hold themselves mutually accountable#8$<at2enbach and Smith3 %!!-F p# ),' In modern organi2ations3 pro7ect teams are rapidly becoming the primary mechanisms for innovation and change# 0he team focus can have a dramatic impact on the roles of managers and subordinates and on the functioning of an organi2ation# 0he team focus can shift an organi2ation from managing by control to managing by commitment# It can change the institution9s emphasis from individual motivation and output to team motivation and outputF from traditional functions of organi2ing3 staffing3 and evaluating to coaching and facilitating# HOW IT WORKS: 0eams are typically comprised of five to seven members3 ith one member selected by senior management to serve as the team leader# 0eams are often created to complete a specific pro7ect or goal or to perform a significant on=going function# 0he creation of a team is generally an indication from senior management that the or1 of the team is an organi2ational priority# 0eams are usually organi2ed as standing teams3 pro7ect teams or crisis teams# Standing 0eams= Certain pro7ects3 types of pro7ects3 customers or issues fre5uently recur ithin an organi2ation# Standing teams can deal ith issues that resurface seasonally or ith issues for hich a group of specialists is the most effective response# Unli1e pro7ect teams3 standing teams e6tend beyond the scope of any one pro7ect and can be characteri2ed as a permanent part of the organi2ation# Pro7ect teams= Assembled for a specific assignment3 this is the most common type of team and is typical in consulting organi2ations# 0he appropriate mi6 of specialists from across the permanent organi2ation are brought together to accomplish a pro7ect ith clearly defined goals and deadlines# >nce the pro7ect is accomplished3 the team members return to their home base or 7oin another team directed at a different set of ob7ectives# A typical pro7ect for such a team might be the installation of a ne computer system3 relocating the office or setting up a ne program# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%) of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector Crisis 0eams= 0he nature of a crisis team is obvious from its name# 0he typical governmental organi2ation roc1s from side to side as a herd of staffers run from crisis to crisis identified by head5uarters3 the 4hite @ouse3 Congress or the media# Crisis teams can be used to mitigate the constant disruption of the agency9s regular or1 $hich can later become a crisis hen it doesn9t get done'# Crisis teams can be organi2ed as pro7ect teams3 assembling a ne team of e6perts to deal ith a specific crisis or the standing team concept3 a on=going sat team could be used# ?enerally3 these pro7ects ould be very high profile and selection for participation on a crisis team should be accorded the proper organi2ational prestige# Clear ground rules are essential to team success# 0eam members must understand the or1 they are to accomplish# 0here should also be a formal reporting structure and schedule for teams to input their activities into the organi2ation9s management structure# 0here should also be regular3 formal feedbac1 to the team from management on their activities and a method of evaluating team performance and the contribution of each team member to that overall performance# ?round rules for each team should be established3 in riting# Among the issues covered should be a process for assigning or13 methods for revieing or13 the role of the team leader3 an evaluation process for team and individual performance3 and procedures for resolving conflicts beteen the team and other organi2ational units# Some organi2ations e6ecute an annual 8contract8 detailing the specific deliverables that the team is e6pected to produce over the course of the year# It is particularly important that staff be provided ith increased levels of specificity and certainty in their communication ith management since the volume of communication ill necessarily be reduced under the ne management structure# Clear goals3 clear roles3 constant and open communication3 a plan of action and ell established ground rules are essential# In addition3 training in beneficial team behaviors and constructive feedbac13 balanced participation3 informality3 listening3 civili2ed disagreement3 1noledge of group behavior3 self= assessment3 style diversity3 and ell defined decision=ma1ing processes all contribute to a successful team# BENEFITS: A team approach to the accomplishment of or1 assignments has been common in many cultures for hundreds of years# Barge multi=national corporations have been using the team approach for a groing percentage of their or1 since the beginning of the decade# 0he team approach is prominent and credited ith much of the success at leading corporations such as .otorola3 :ord3 -. and ?eneral Alectric# 0eams perform ell because they bring together people ith complementary s1ills and e6periences that e6ceed the capacity of any one of the members or of the members collectively but or1ing independently# 0he broad base of teams enables them to respond ell to a ide variety of challenges from customers3 change and technological innovation# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%, of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector Second3 the communication s1ills and netor1 that successful teams develop creates a capacity to respond 5uic1ly and fle6ibly to ne problems and a changing environment# Individuals seldom have the resources in time3 s1ills and attitude to adapt to change or ne obstacles as rapidly or effectively# 0eams also facilitate the brea1ing don of barriers beteen genders3 age groups3 races3 ethnic groups and geographic biases# 4ith such barriers reduced3 an environment of greater trust and mutual confidence develops3 as ell as a stronger commitment to organi2ational goals# :inally3 advocates argue that teams have more fun# 0his 1ind of fun is important because it comes out of meeting and or1ing together to solve important organi2ational problems or in striving to meet organi2ational goals# 0eams or1 long3 hard and ell in part because the members en7oy the process of collaboration and achievement# 0hey often celebrate their successes and discuss their failures together3 hich reinforces the social and positive or1 aspects of the team e6perience# <at2enbach and Smith cite the phenomenon of being part of something greater than 7ust yourself# $<at2enbach K Smith3 %!!-F p# %!'# COSTS: A lac1 of conviction from management can communicate to the organi2ation9s members that or1 in teams is not serious business but more of a human resources3 spirit=building e6ercise# 0his ill reinforce the pre7udice of some that individual performance is the only thing that counts and that or1 in teams 7ust astes time in meetings and tal1ing hen real or1 could be getting done# In such circumstances3 time spent in teams ill be asted time# A6cept for athletes3 most of our formative e6periences in school and social organi2ations reinforce individual or1 and evaluation# It is not surprising then3 that many people feel at ris1 and uncomfortable hen the team structure is introduced into their or1 setting# 0he problem becomes e6treme hen the performance evaluation system and compensation systems are not modified and therefore reard only individual achievement# .ost members receive the clear signal that or1 in teams is not important# 0his reard problem is compounded hen promotions are tied to progress up the supervisory ladder of the traditional bureaucracy# In such circumstances3 e6pending time and energy in team settings is at best a aste and could even damage your prospects for a future in management# 0eams inevitably face obstacles hich3 if not overcome3 can aste the organi2ation9s resources3 hamper morale and ultimately lead to the organi2ation9s demise# 0o prepare individuals for effective team performance3 initial training and on=going access to help and advice is critical# Internal or hired consultants are used but in either case3 there is an on=going e6pense involved# It is even more e6pensive but as important to revise the organi2ation9s performance evaluation and file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%" of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector compensation system to reflect and reard performance in team settings# Career ladders must be created to ma1e sure that talented employees do not come to vie team assignments are a career dead=end# 0here also must be clear guidelines regarding ne6t assignments hen a team completes its or1 and is disbanded# :inally3 moving to team management is a reorgani2ation and thereby includes the dislocation and e6pense of a more traditional organi2ation# Some ill resist the change and others ill see1 to undermine it# Iob descriptions3 career ladders3 evaluation systems and often office configurations ill need to be revised# And3 there is alays the danger that the performance improvements anticipated by management ill not meet e6pectations3 and the costs of another reorgani2ation ill follo# +, P5I3A/I;A/I-# DEFINITION: Utili2ing private3 or non=governmental organi2ations in the implementation of public policy3 often replacing direct government provision of particular programs or services# @>4 I0 4>E<S: Privati2ation ta1es four different forms# 0he first is contracting out functions that government agencies used to implement ith their on staff# .anagement control is still retained by government3 and the option of ending a contract and resuming direct government control is retained# 0he second form of privati2ation involves turning over a government=run enterprise such as a phone system to the private sector3 by selling government assets and monopolies to private firms# 0he third form of privati2ation is a public=private partnership3 here government and the private sector or1 7ointly3 ith clearly defined roles3 on a public purpose# De Cor1 City9s ;usiness Improvement Districts are an e6ample of such a partnership# Under this model3 the businesses located ithin a specific geographic area vote to create an organi2ation to provide additional services such as security3 clean=up3 maintenance and mar1eting and in return they agree to levy a ta6 assessment on themselves# 0he city collects these fees as part of the normal ta6ation process and returns the fees to the ;usiness Improvement District organi2ation# 0he forth form of privati2ation is public policy designed to encourage private behavior# 0his type of leveraging public resources to encourage private activity typically involves ta6 policy such as targeted credits or deductions3 or deregulation# :ederal home mortgage insurance and subsidi2ed flood insurance are e6amples of this leverage approach# BENEFITS: 0he issue of privati2ation often appears along ith a great deal of ideological baggage about the relative value and competence of the government and the private sector# .any of its most ardent supporters believe that smaller government is a benefit in and of itself# 4e believe that the decision to privati2e should be analy2ed ithout a preconceived notion that it is the better ay until proved otherise# In our file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%J of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector vie3 the chief benefit of privati2ation is that it opens up the possibility of competition in the performance of a public function# 0his is not to say that competition is a cure all# 0here are some instances hen competition is not possible or desirable# @oever3 in many cases higher 5uality3 less e6pensive services and programs can be delivered hen organi2ations compete for the business and customer choice can be ma6imi2ed# Another benefit of privati2ation is that it facilitates organi2ational differentiation and focus# It allos governmental policyma1ers the freedom to achieve the >sborne and ?aebler dictum to steer rather than ro# It enables public managers to focus on policy design and program evaluation3 and allo others to orry about the direct administration of governmental programs# COSTS: 0he principal costs of privati2ation stem from the loss of direct control over program administration# 0he production of goods and services needed to implement public policy is no longer in the hands of government# If one private entity develops monopoly control of a service3 or dominates that industry and holds a 5uasi=monopoly3 government9s ability to influence program implementation may be compromised# 0he s1ills and 1noledge gained through administration belong to the private firm and not the government# ?overnment may come to lac1 the technical e6pertise or 1noledge base to effectively manage their private partners# Conceptually program implementation and policy formulation are interconnected# Policy design must account for organi2ational capacity# Affective program implementation re5uires a 1noledge of administrative issues and the ability to influence administrative behavior# A reduced understanding of administrative issues and reduced leverage over implementation behaviors is a cost of privati2ation# 3, Integrating and Using /echni4ues o Public .anagement Innovation In our vie3 all organi2ational innovation must begin ith a strategy# 4ithout organi2ational consensus on its mission and a road map for achieving its 1ey ob7ectives3 better management has no meaning# A more efficient or economical method of producing a product or service fe people desire is hardly orth the effort# So3 for us3 all management innovation initiatives must begin ith strategic planning# 4ith the organi2ation9s mission and 1ey ob7ectives articulated and agreed upon3 the most effective method$s' to achieve them can then be selected# 5eengineering is a macro=internal strategy that is both comprehensive and e6pensive# It implies that the organi2ation is still a viable vehicle to achieve its ob7ectives but it needs a radical restructuring of its methods# Eeengineering has or1ed ell in both the public and private sectors but it is a high=ris1 option3 re5uiring strong leadership at the top3 e6tensive resources and the time to succeed# 0o us3 it is inconceivable that an organi2ation ould go forard ith a reengineering pro7ect ithout first engaging in a serious3 thoughtful strategic planning process# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%+ of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector In addition3 some of the costs of reengineering could be mitigated by combining and/or setting the organi2ational stage ith some of the other innovation techni5ues e have discussed# 0he fear of reengineering3 particularly due to its top=don philosophy and association ith donsi2ing could be offset by ensuring the ma6imum feasible participation of the staff in the planning stage# A benchmarking e6ercise3 involving a ide array of organi2ational units could identify successful reengineering programs not re5uiring massive donsi2ing and in the process help create staff buy=in to the effort# 4e also believe that mature /7. organi2ations are better prepared for a reengineering effort ith several years of staff involvement in analy2ing their or13 thin1ing in a continuous improvement mode and seeing or1 as a continuum from supplier through the organi2ation to customers# A level of trust and cooperation beteen management and or1ers that evolves from a successful 0G. effort ould help enormously in achieving support for the reengineering effort# It has become very popular to critici2e /7. in the US recently# 0he supposed 8failures8 of 0G. are often the failures of half=hearted histle and bell consultant e6ercises that are not integrated into the regular or1 organi2ation or are the inadvertent prelude to a massive donsi2ing initiative# 4e have seen and participated in successful 0G. initiatives in organi2ations large and small3 public and private3 groing and stable# ;ut as e have discussed3 0G. has a greater chance of getting off to a successful start if it is pro7ect=based# 0G. provides an e6cellent foundation for other innovation strategies3 as it can and should invite participation from all levels of the organi2ation3 encourages every member of the organi2ation to thin1 about their or1 in the conte6t of continuous improvement and establishes the frameor1 of supplier= organi2ation=customer# 4hile 0G. can move an organi2ation forard3 if an organi2ation9s basic systems are inade5uate3 the 0G. improvements ill tend to 8bounce against8 those ineffective systems# It is at this point and in this ay that 0G. helps identify fruitful targets for reengineering# Benchmarking should be a part of any effort to innovate ithin an organi2ation# It is useful in strategic planning3 0G.3 reengineering and even privati2ation# As each organi2ation establishes its on innovation plan of action3 it is usually instructive to learn ho other organi2ations have approached changing similar processes $/7.' or systems $5eengineering'# It is also helpful in defining your mission or in setting ob7ectives to 1no ho similar organi2ations have completed that e6ercise# >r to bring team management into your shop3 ouldn9t you ant to 1no ho the organi2ation9s noted for their effective teams has made their system or1H ;enchmar1ing can also stimulate imaginative thin1ing# It can help overcome the s1epticism3 particularly in government organi2ations3 that the innovation strategy beginning planned is 7ust another management 8fad8 by presenting concrete models of success# ;ut benchmar1ing ithout a management strategy to implement the desired innovation/ improvement is a meaningless and asteful e6ercise# /eam management can be a stand alone innovation techni5ue that can help facilitate cooperation and file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $%! of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector coordination among organi2ational members3 cope ith donsi2ing and/or help flatten the organi2ational hierarchy# It reflects Druc1er9s observation that most organi2ations are increasingly populated by highly educated3 highly s1illed 1noledge or1ers ho are capable and more interested in or1ing together to achieve shared ob7ectives than being told hat to do# 0eam management is also an essential component of any successful /7. initiative# 4ithout a commitment and ability to or1 in teams3 0G. innovation is impossible# Similar to the other innovation techni5ues discussed in this paper3 an effective team management structure is rather meaningless ithout a clear mission and organi2ational consensus around 1ey ob7ectives# And3 similar to 0G.3 team management can 8bounce against8 fundamental systems that do not or1# In such circumstances3 to achieve sustainable improvement3 a team management innovation must be combined ith either reengineering or some form of privati2ation# Privati<ation ma1es sense only after the organi2ation has gone through a strategy planning process to determine hat it is about# 0he core functions essential to the organi2ation9s reason for being are the activities it can and should do itself# :unctions that need to be performed but are not central to the organi2ation9s definition of self can be privati2ed# :or e6ample3 the US Anvironmental Protection Agency9s$APA' Superfund to6ic aste clean=up program contracts ith private organi2ations for the clean=up of aste sites# Do APA staff actually perform clean=up or1# >n the other hand3 decisions about here clean=up or1ers are assigned and ho clean a site needs to be are made by APA staffers# 0his allocation of or1 tells us hat is central to APA9s mission and hat is not# It is essential for an effective organi2ation to have a clearly defined focus# >nce this is determined3 the organi2ation should strive to shed functions that are not central# 0o do higher 5uality3 more cost effective or13 an organi2ation must focus its resources on those functions central to its e6istence and shed or contract out secondary functions# 0oo often3 the basis for privati2ation is not such a strategic planning e6ercise3 but rather a matter of e6pediency to raise immediate cash for budget=balancing3 escape criticism for poor performance3 or fit into a blind commitment to the philosophy that the mar1et cures all ills# In sum3 e see privati2ation as an alternative to internal management innovation that can be an effective tool3 if used thoughtfully and for the right reasons# 3I, Conclusion 4e rote /he #e= Eective Public .anager because e remain convinced that the public sector can not only or1 ell but that an effective public sector is essential to a healthy3 thriving society# ;ut e also believe that much has been learned regarding management over the past decadeF particularly3 hile e still believe an effective public manager must be an e6pert in or1ing around constraints3 e also believe e need to or1 harder at removing constraints# Sometimes it is better to attac1 and eliminate an outmoded process than to aste resources or1ing around it# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $&* of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector Strategic planning3 reengineering3 0G.3 benchmar1ing and team management are viable innovation techni5ues3 especially hen used in combination ith each other to help public managers ma1e public organi2ations the effective organi2ations they need to be3 if modern society is to 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De Cor1: @arper;usiness3 %!!-# @ammer3 .ichael and Stanton3 Steven A# Th Rn)inrin) R/o!ution# De Cor1: @arper;usiness3 %!!,# <at2enbach3 Ion and Smith3 Douglas# Th Wisdo& of T$&s# ;oston: @arvard ;usiness School Press3 %!!-# <ettl3 Donald# 8;uilding Basting Eeform: Anduring Guestions3 .issing Ansers8 in Insid th Rin/ntion 6$chin: Appr$isin) 7o/rn&nt$! Rfor&# ;y Donald <ettle and Iohn Dilulio $eds#' 4ashington3 D#C#: ;roo1ings Institute3 %!!,# <ettl3 Donald3 Sh$rin) 8o'r: 8u-!ic 7o/rn$nc $nd 8ri/$t 6$r#ts# 4ashington3 DC: 0he ;roo1ings Institute3 %!!-# file:///C|/Users/admin/Documents/ebsites/cohen/notused/aspa!"fnl#html $&% of &%' (%%/)/&**+ ":,-:-- P./ Understanding and Applying Innovation Strategies in the Public Sector Binden3 Eussell# 8A ?uide to Eeengineering ?overnment38 ?overning# .ay3 %!!,3 pp#"-= J)# .ercer3 Iames# Str$t)ic 8!$nnin) for 8u-!ic 6$n$)rs. De Cor1: Guorum3 %!!%# ;ac1 to Personal @omepage SIPA Directory Co!u&-i$ 2ni/rsit0 Ho& 8$)